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Suppose that a firm has a monopoly on a good with the following demand schedule:
Quantity Price
0 $10
1 $9
2 $8
3 $7
4 $6
5 $5
6 $4
7 $3
8 $2
9 $1
10 $0
a. What price and quantity will the monopolist produce at if the marginal cost is a constant $4?
b. Calculate the deadweight loss from having the monopolist produce, rather than a perfect competitor.
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